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Shatel Plans to Expand

Only a day after the Telecommunications Company of Iran said it was offering 51% of shares, Shatel, Iran's largest private broadband Internet provider, was the most prominent potential buyer to show interest.

The company's CEO, Mohammad Hassan Shanehsaz-Zadeh, confirmed the report by saying his company had formally submitted documents to the Ministry of Communications and Information Technology and the Communications Regulatory Authority expressing their interest in buying a large proportion of TCI's shares.

"We have created a consortium with two other local companies—Dadeh Gostar Asr Novin and Neda Gostar Saba—and a third [unnamed] foreign company to buy the shares," Shatel's CEO said.

Not having gone directly to TCI has raised controversy and TCI has announced that aside from Shatel, three foreign operators have also expressed interest in purchasing the shares, Tasnim News Agency reported.

In his defense, Shanehsaz-Zadeh said the terms of the bloc offering were dubious to begin with, in one specific case it clearly states that the offering can be called off for during the bidding process, with no reason given. "To prove that we are serious, we had no other choice but to go straight to the ministry."

Tose-e Etemad Mobin, owns 51% of shares and the managerial bloc of TCI with three out of five chairs on the board of directors. The company will be selling all its shares.

Shatel's CEO has said that with the complete privatization of this bloc for streamlining management, boosting productivity, improving services and taking developmental measures, his company can improve the situation for TCI.

If given the go-ahead, the move by the largest Internet service provider could send shockwaves through the telecommunications industry in Iran. Up till recently, all telecoms providers in Iran have been entirely government owned. The Shatel offer would radically transform the market, allowing the Internet provider to push package deals of phone, Internet and mobile.

Earlier this year, Shatel also announced its intentions to move into wireless communications by applying a new fourth generation mobile Internet license from the Telecommunications Ministry. The company has also insisted that it can also take on traditional phone providers like MCI and MTN-Irancell.

If Shatel is granted both the mobile license and a controlling share of the capital's sole telecoms provider, it may face a backlash from competitors and the telecoms ombudsman over its growing presence.